The knock is caused by the piston/rod assembly getting a running start due to excessive clearance, and hammering into the crankshaft journal. The rod bearing is supposed to "float" on a thin film of oil, with no metal-to-metal contact, but when the clearance gets over about .003" or so it's impossible to maintain that cushion of oil. Once the hammering starts, the damage is progressive, causing more clearance, a harder knock, more metal particles dislodged, more scoring, more clearance, harder knock - - - - - -you get the picture. The increased clearance causes most of the oil pump output to go to the wide gap, dropping the pressure to the other bearings. The whole situation can be caused by a single grain of sand, or one flake of metal that begins the bearing-scoring process.
Engine assembly should be done in a surgically-clean environment, to prevent building in enough dirt to cause immediate, catastrophic bearing failures. Some NASCAR shops actually use "clean rooms" for engine assembly, with builders in special lint-free suits and booties, and a positive pressure environment with air lock entry, to assure clean assembly of their engines!
While it might not be necessary to build a street engine that way, I get pretty anal about starting with very clean parts, and keeping my engine assembly area in a very clean part of the shop.
Jerry
